Exhibit 10.86
AMENDMENT NO. 3 TO SERIES C CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT
This Amendment No. 3 (the "Amendment") dated as of September , 2004, is
made to that certain Series C Convertible Stock Purchase Agreement (the "Series
C Stock Purchase Agreement") dated as of September 4, 2003 and Amendment No. 1
as of December 31, 2003, by and between INSCI Corp., a Delaware corporation (the
"Company") and SCP Private Equity Partners II, L.P., a Delaware limited
partnership (the "Investor" or "SCP"), and is executed by the Company and the
Investor. Capitalized terms not otherwise defined in this Amendment shall have
the same meaning as set forth in the Series C Stock Purchase Agreement.
RECITALS
WHEREAS, the Company wishes to issue and sell additional shares of
Series C Preferred Stock and SCP wishes to purchase the shares (the "Purchase");
and
WHEREAS, the Company and the Investor desire to amend the Series C
Stock Purchase Agreement to increase the total number of shares of Series C
Preferred Stock authorized to be sold to SCP, and to update certain other
information;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants hereinafter contained, the parties, agreeing to be
legally bound, hereto agree to the following:
1. AMENDMENTS. It is understood and agreed that the Series C
Stock Purchase Agreement dated as of September 4, 2003 and Amendment No. 1 dated
as of December 31, 2003, and Amendment No. 2 as of September , 2004, are annexed
hereto and made a part hereof. Effective as of the date hereof, the Series C
Stock Purchase Agreement shall be amended as follows:
1.1 DEFINITIONS. Together, the Investor and CSSMK shall be
referred to as the "Investors". Any reference to the "Investor" in Sections 2
(including Sections 2.1-2.28), 3.2, 3.3, 3.5, 3.6, 3.7, 7.1, 7.2 and 7.10 shall
be amended by deleting it and replacing it with the term "Investors". Annexed
hereto and made a part hereof is a true copy of the Agreement dated as of
September 4, 2003 and Amendment dated as of December 31, 2003.
1.2 A new Section 1.(e) is hereby added to the Agreement,
reading as follows: "Subject to the terms and conditions of this Agreement, SCP
agrees to purchase, and the Company agrees to sell and issue to the 180,450
shares of the Series C Preferred Stock at a price per share of $1.9396, for an
aggregate purchase price of $350,000 on September , 2004. The rights, privileges
and preferences of the Series C Preferred Stock shall be as stated in the
Designation."
1.3 Section 7.7 is amended to read in its entirety as follows:
Notices. "All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial overnight courier
(with confirmation of receipt) or sent via facsimile (with confirmation of
receipt), (a) in case of the Company, to the Company at Xxx Xxxxxxxx Xxxxx,
Xxxxx 000 X, Xxxxxxxxxxx, XX 00000 (Fax No.: (000) 000-0000), Attention:
President, with a copy to Xxxxxxx & Xxxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000; (b) in the case of SCP Private Equity Partners II, L.P., to SCP Private
Equity Partners II, L.P. at 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000; Xxxxx,
Xxxxxxxxxxxx 00000 (Fax: (000) 000-0000), Attention: General Counsel (or at such
other address for a party as shall be specified by like notice), with a copy to
Xxxx Xxxxx LLP, Centre Square West, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx
XX 00000-0000 (Fax: (000) 000-0000), Attention: Xxxxxxx X. Xxxx. Notice given by
facsimile shall be confirmed by appropriate answer back and shall be effective
upon actual receipt if received during the recipient's normal business hours, or
at the beginning of the recipient's next business day after receipt if not
received during the recipient's normal business hours. All notices by facsimile
shall be confirmed promptly after transmission in writing by certified mail or
personal delivery. Any party may change any address to which notice is to be
given to it by giving notice as provided above of such change of address."
2. Other Provisions.
2.1. CONSIDERATION. At the Closing, the Company shall deliver
to the Investor, a certificate representing 180,450 shares of the Securities
against payment of $350,000 by wire transfer or good check.
2.2 INVESTMENT EXPERIENCE. The Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Securities
and can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Securities.
2.3 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations made by it herein or heretofore, the Investor
further agrees not to make any disposition of all or any portion of the
Securities or the Conversion Shares unless and until the transferee has agreed
in writing for the benefit of the Company to be bound by this Section and the
applicable provisions of the Amended and Restated Registration Rights Agreement
and:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(b) The Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition and, if
requested by the Company, shall have furnished the Company with an opinion of
counsel, reasonably satisfactory
to the Company that such disposition will not require registration of such
shares under the Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances or unless required by a transfer agent.
Notwithstanding the provisions of subsections (a) and (b) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by the Investor to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner or the transfer by gift, will or intestate succession
of any partner to his or her spouse or to the siblings, lineal descendants or
ancestors of such partner or his or her spouse, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if he or she
were an original investor hereunder. Notwithstanding the foregoing, no such
registration statement or opinion of counsel shall be necessary for a transfer
by SCP to any party approved by the INSCI Board of Directors.
(c) The Company represents to Investor that there have been no
material adverse changes in the representations as set forth in the September 4,
2003 Agreement and Amendment as of December 31, 2003, and Amendment No. 2 to the
Series C Convertible Preferred Stock Purchase Agreement and that the Independent
Board of Directors of the Company have authorized and approved the within sale
of Securities.
(d) SCP understands and agrees that as a result of the within
purchase transaction will not cause an adjustment in the Series C Preferred
Stock Conversion Price under the Certificate of Designation with respect to such
Series.
2.4 MISCELLANEOUS. Except as amended hereby, the Series C
Stock Purchase Agreement, as amended heretofore, shall remain in full force and
effect. This Amendment shall be governed by the laws of the State of Delaware,
and may be executed in multiple counterparts, each of which shall be considered
an original but all of which shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Series C Stock Purchase Agreement as of the date first above written.
COMPANY:
INSCI CORP.
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: CEO
INVESTOR:
SCP PRIVATE EQUITY PARTNERS II, L.P.
By: SCP Private Equity II General Partner,
L.P., its General Partner
By: SCP Private Equity II LLC
By: /s/ XXXXXXX XXXXXXXXX
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Name: Xxxxxxx Xxxxxxxxx
Title: a Manager
CSSMKK:
CSSMK, LLC
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: Manager
